While Tesla (TSLA) is generally focused more on electric vehicles, its CEO, Elon Musk, tends to have a broader view. Just ask anyone who bought his flamethrower. But his work with artificial intelligence (AI) has apparently hit a snag, and one that seems to be impacting the broader world. There is simply nothing left to use to train AI models with.
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Essentially, Musk noted, the sum total of human experience and knowledge has been, pretty much, fed to AI already. In fact, Musk noted, this happened “basically last year.” Which is actually something of a surprise, because at last report, there were still several lawsuits outstanding about books and other works being used in AI. One such lawsuit actually started up back in August 2024, which, given the pace of the court system, suggests that it is still unresolved.
This in turn suggests a period known as “peak data” has occurred. During “peak data,” the loss of previously existing data will, ultimately, force AI model training to occur in a whole different way. And even Musk himself offered up a look at just what that path would look like.
The Training Will Eat Itself
Musk described a kind of ouroboros effect, a snake eating its own tail forever. Essentially, Musk looked for AI to be trained using “synthetic data,” that is, data generated by AI itself. The AI will create its own training data, Musk noted, and in turn, it will be able to grade itself, learn from its own mistakes, and “…go through this process of self-learning.”
Which seems, perhaps, unnecessary; one of the great things about the human experience is that, generally, new content is created nearly every day on one level or another. It may not be as simple as it was in the past to get—the low-hanging fruit of previous experience is gone—but everything that will be made tomorrow, and tomorrow, and next month are all in play. But with several AI makers like OpenAI and Anthropic already turning to synthetic data for training, Musk’s call for artificial data to drive artificial intelligence development seems well under way.
Is Tesla a Buy, Sell or Hold?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 13 Buys, 12 Holds, and nine Sells assigned in the past three months, as indicated by the graphic below. After a 68.82% rally in its share price over the past year, the average TSLA price target of $320.90 per share implies 18.75% downside risk.
